Chapter 14 Ethics Professionalism and Social Responsibility

Fundamentals of Entrepreneurship All Rights Reserved
© Oxford Fajar Sdn. Bhd. (008974-T), 2013 1– 1

CHAPTER 14
ETHICS PROFESSIONALISM
AND SOCIAL RESPONSIBILITY

Objectives
The objectives of this chapter are to:

 know, understand, appreciate and realize the
importance of good morals, ethics and professional
values in working life
 understand the meaning being professional in their
work
 appreciate the importance of social responsibility
agenda to a business organization

Learning Outcomes
At the end of this chapter, students should be able to:

 learn that good character is a very important ingredient
for success in life in the long term. Success should not be
based merely on material achievement alone but include
the practises of good moral and ethical principles.
 know, understand, appreciate, and relate to corporate
social responsibility project undertaken by any business
organization.

Introduction
 Ethics involve personal believe, values and good practices

such as being disciplined, honest, responsible and
trustworthy and it is the basis of judgement whether a
person’s action is good or bad, or right or wrong, virtue or
vice, justice or crime, etc.
 Professionalism means a person is competent and qualified
to do a specific task and he undertakes to do the task in the
manner that is to be expected from a professionally
competent person such as acting with due care, skill,
diligence and complying with the rule of law, regulations and
code of practice.
 Being socially responsible mean a person will ensure that his
action will contribute benefits to the society, environment and
country and it will not create harmful output or impact to the
society and country.
The Importance of Ethics and Code of Good
Professional Conduct for Individuals and
Corporate Organizations
 Fundamentally, entrepreneurs operate their business to offer
products and services to their customers and in the process make
some profit. The process by which a person does his business
should be ethically and legally right, contribute benefits to the
society and does not pose any harmful impact to the society or
environment.
 In the long term, our success will always depend on our skill and
characters. As the chairman of one of the largest and most
successful pharmaceutical company, Bristol-Myers Squibb, puts it,
‘Men succeed less by their talents and more by their character’
(George, 1997).
 Ethics encompasses honesty, forthrightness, reciprocity, fair play,
keeping commitments, and kindness.’ (George, 1997).

The Importance of Ethics and Code of Good
Professional Conduct for Individuals and
Corporate Organizations
 Success in life is not merely based on material achievement alone.
Worldly achievement void of ethical principle and good deed in most
cases is only success waiting to crumble.
 Life on this earth should have a greater meaning than just merely
self-interest in the form of big houses and cars only. Everyone has
the potential to create wealth that is beneficial to him, society and
nation.
 Good names, character and integrity are always the foundation of
success and they are the final test of a person true quality. Success
that is based on good ethical and moral conduct is more holistic,
meaningful, satisfying and an example for others to emulate.

The cost of non-ethical, non-
professional and socially irresponsible
 Success in life is not merely based on material achievement alone.

Worldly achievement void of ethical principle and good deed in most
cases is only success waiting to crumble. Achievement void of
ethical principle and good conduct is only an achievement that
appears to be successful outwardly but internally, it is often full of
worry, anxiety, sleepless-night, depression and self-doubt that may
cause a person self-destructive process.
 Money obtained through illegal means is supposed to give one
prosperity and happiness but it often become a source of misery
and shame to the person and his family.
 Warren Buffett, the famous American investor and businessman,
said that ‘a good name and reputation may take years to be
established but it can be destroyed in a matter of minutes only if one
is not careful.

Factors That Influence Individual Ethical
Values And Practises
 Family Influences
 Life Experiences
 Peer Influences
 Religious Beliefs
 Situational Factors or Conflict of Interest

Islamic Ethical Values
A Muslim should find it easy to resolve any Islamic ethical

issues, as in most cases, the moral, behavioural and
ethical guidance provided on business dealings in Islam
are very comprehensive and details.

Islamic Ethical Values (cont.)
The followings are key Islamic principles that have been

found to have great influence on a Muslim way of life
including his moral and behavioural practises in doing
business:
His fundamental believe in the oneness of god and his
role is to be an obedient servant who follow all the
prescribe teaching of Islam outline in the Qur’an and
prophet S.A.W practises (Sunnah). Islamic teaching
prescribe that a Muslim behaviour and etiquette (Akhlak
and Adab) toward other fellow Muslim, non-Muslims and
all other god creations such as environment (Makhluk).

 His believe in the life of the hereafter where his every act in
this world will be examined and given rewards and
punishment accordingly. Hence, he should be mindful of not
to transgress Islamic legal limit (Syariat) as outline in Islam.
 The important of making sure that whatever earnings he
pursues and obtains should be ‘halal‘ i.e. permissible by
Islam. Clear guide lines are provided to determine whether
something is halal or otherwise.

 He should be willing to use his assets and earnings to

pay obligatory religious contribution (Zakat) and
contribute donation (Sadaqah) to the unfortunate such
as orphanage, etc. and he must avoid being greedy or
act like a miser. Whatever his materials contribution
will be rewarded in the hereafter.
 The concept of god blessing (Barakah) mean that a
smaller earnings can be superior than a bigger
earnings if it is earn through ethical and legal mean
and as such earning is full of Allah’s blessing. Any
illegal and unethical earning that was used to feed
one’s family lacked god’s blessing, will tainted his soul
and may bring harmful effects to the family.

 In the pursuit of material gain, a Muslim is govern by a few

values such as being ready, satisfied and willing to accept
whatever is ordain to him by god (Qanaah), being thankful to
god at all time (Syukur) and being steadfast in any
undertaking and patience in any difficulties (Sabar). These
values should help him to be mindful not to succumb to bad
desire, temptation and avoid transgressing the ethical limit
provided by the Islamic legal limit (Syariat) and the country
law.
 In short, a practising Muslim will always want to earn income
that will lead him to prosperity, happiness, purify his soul and
get God’s blessing in this world and be equally successful in
the hereafter.

What is Social Responsibility?
Corporate social responsibility (CSR) refer to the practices of

assuming a certain responsible acts by corporate
organizations to create positive impact to environment,
consumers, employees, communities, stakeholders and all
other members of the public sphere. Social responsibility
means organizations or individuals practice good ethical
principles and act as a good corporate or individual citizen of
the country.

What is Social Responsibility? (cont.)
An entrepreneur business activity should benefit him as a person and at the

same time it should contribute macro benefit to the society and nation.
Business projects that polluted the environment and caused suffering to the
society in fact contribute negatively to the society and nation.

What is Social Responsibility? (cont.)

Views on Social Responsibility
The general view on business is that entrepreneurs are willing to

sacrifice anything in order to get their profit. In recent years,
incidents of poor quality products, imitation products, addition of
harmful material into manufactured food (e.g. addition of melamine
to milk in China), irresponsible act of throwing poisonous material
into the river, etc. are examples where corporate irresponsibility are
frequently being highlighted in the newspapers.

Views on Social Responsibility (cont.)


Example of an irresponsible act that caused irreparable damaged of Minamata

Mercury Poisoning (sourced from Wikipedia).
Minamata is a neurological syndrome caused by severe mercury poisoning.
Symptoms include ataxia, numbness in the hands and feet, general
muscle weakness, narrowing of the field of vision and damage to hearing and speech
. In extreme cases, insanity, paralysis, coma and death follow within weeks of the
onset of symptoms. A congenital form of the disease can also affect fetuses in the
womb.
Minamata disease was first discovered in Minamata city in Kumamoto prefecture,
Japan in 1956. It was caused by the release of methylmercury in the industrial
wastewater from the Chisso Corporation's chemical factory, which continued from
1932 to 1968. This highly toxic chemical bioaccumulated in shellfish and fish in
Minamata Bay and the Shiranui Sea, which when eaten by the local populace
resulted in mercury poisoning. While cat, dog, pig, and human deaths continued over
more than 30 years, the government and company did little to prevent the pollution.
As of March 2001, 2,265 victims had been officially recognised (1,784 of whom had
died) and over 10,000 had received financial compensation from Chisso. By 2004,
Chisso Corporation had paid $86 million in compensation, and in the same year was
ordered to clean up its contamination. On March 29, 2010, a settlement was reached
to compensate as-yet uncertified victims.
Balance Consideration to
All Stake Holders Interest:
Entrepreneurs/businesses
need to take active steps
in protecting the needs of
their stake holders. They
need to adopt a balanced
approached in order to
achieve its social
responsibility goals.

Benefits of Social Responsibility


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Fundamentals of Entrepreneurship All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2013 1– 1

Fundamentals of Entrepreneurship All Rights Reserved

The objectives of this chapter are to:

Fundamentals of Entrepreneurship All Rights Reserved

At the end of this chapter, students should be able to:

Fundamentals of Entrepreneurship All Rights Reserved

 Ethics involve personal believe, values and good practices

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

 Success in life is not merely based on material achievement alone.

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

A Muslim should find it easy to resolve any Islamic ethical

Fundamentals of Entrepreneurship All Rights Reserved

The followings are key Islamic principles that have been

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

 He should be willing to use his assets and earnings to

Fundamentals of Entrepreneurship All Rights Reserved

 In the pursuit of material gain, a Muslim is govern by a few

Fundamentals of Entrepreneurship All Rights Reserved

Corporate social responsibility (CSR) refer to the practices of

Fundamentals of Entrepreneurship All Rights Reserved

An entrepreneur business activity should benefit him as a person and at the

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

The general view on business is that entrepreneurs are willing to

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

Example of an irresponsible act that caused irreparable damaged of Minamata

Fundamentals of Entrepreneurship All Rights Reserved

Fundamentals of Entrepreneurship All Rights Reserved

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